How to Secure Financing for Your Next Vehicle

Key Ways to Finance Your Car in India

1. Bank Car Loans

Major banks like HDFC Bank, State Bank of India (SBI), ICICI Bank, Axis Bank, Union Bank of India, and others dominate the car loan market. They offer diverse car loan products for new and used cars, as well as refinance and top-up options.

• Loan amount: Up to 90%–100% of on-road car price

• Tenure: 1 to 8 years, depending on the lender and your profile

• Interest rates: Start as low as 8.9%–10.2% per annum for new cars; used car loans generally start from ~12.5%

• Processing fees: Typically ₹3,500–₹12,000 (varies by bank)

• Eligibility: Salaried (age 20–65) or self-employed (21–70), minimum income criteria, acceptable CIBIL score (typically 700+)

• Down payment: Some lenders offer 100% funding, allowing you to buy certain cars with zero down payment if you qualify

• Documentation: Identity/address proof, income documents, bank statements, and KYC

2. Non-Banking Finance Companies (NBFCs) & In-House Dealers

NBFCs like Mahindra Finance, Bajaj Finserv, Tata Motors Finance, and dealer-linked finance solutions offer loans to a broader range of credit profiles—including those with limited credit history. These are particularly useful for buyers in rural areas or the self-employed sector.

3. Online Loan Marketplaces

Websites like BankBazaar, CarWale, CarDekho, and manufacturer portals (e.g., Maruti Suzuki Finance) let you compare loan offers, check EMIs, and apply online with ease.

4. Leasing/Subscribing

Leasing and car subscription services are gaining traction among urban buyers but remain separate from traditional loans.

Typical Steps to Buy a Car on Finance

1. Choose your car and budget.

2. Compare loan offers—check EMI calculators for monthly outflow.

3. Apply online or at dealership—fill digital or in-person loan applications.

4. Submit documents—ID, address proof, income, bank statements.

5. Get approval & sanction—usually within hours to 1–2 days for pre-approved customers.

6. Loan disbursal—funds sent directly to the dealer.

7. Take delivery—pay any remaining balance (if required) as down payment and drive home your new car.

Best Banks & Finance Companies for Car Loans (2025)

• HDFC Bank: Up to 100% funding, digital process, approval in 30 minutes

• SBI: Attractive rates, quick disbursal, minimum paperwork, pre-owned & green car options

• ICICI Bank: Rates from 9.1% p.a. onwards, tenure up to 7 years, minimal documents

• Axis Bank: Interest from 8.9% p.a., flexible tenure, easy online application

• Mahindra Finance, Tata Motors Finance: Suitable for wider or rural reach, NBFC flexibility